...Net Present Value and Internal Rate of Return Individual Case Study: BMW 335i versus Infiniti G37 Sport Coupe Wayne Powers TMAN 625: Economic and Financial Analysis Dr. John Markevicz April 04, 2010 Table of Contents Abstract…………………………………………………………………………………..3 Introduction……………………………………………………………………………...4 Case Study Analysis……………………………………………………………………..5 Financial Analysis on the Future Value of the BMW 335i…………………….....5 Financial Analysis on the Future Value of the Infiniti G37 Sport Coupe………...6 Conclusion……………………………………………………………………………......7 References……………………………………………………………………………......9 Table 1: The Value of the BMW 335i from 2010 to 2013…………………………......5 Table 2: The Value of the Infiniti G37 Sport Coupe from 2010 to 2013……………..6 Abstract This report gives details of the financial decision making used when purchasing one of the following two types of cars: a BMW 335i and an Infinity G37 Sport Coupe. The financial decision making was based on which of the vehicles would have the better future value. The purpose of selecting one of the vehicles was to preserve the capital used in buying the car in a way that it would not depreciate after three years. Using two important financial analysis tools, it is interesting to discover that each car presents a different future valuation. The decision to purchase the BMW 335i was made based on the results from the mathematical calculation of Net Present Value (NPV) and Internal Rate of Return (IRR)...
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... | |Company Name: |Bayerische Motoren Werke AG (BMW) | |Mission Statement. | |The BMW group is a world leader in providing premium products and services to allow individual mobility. | |Summarize the company’s mission (what does it mean?). | |The mission of BMW is to provide individuals with the option of transportation. | |History of company up to present day. | |BMW was founded in 1916. | |In 1922 the company relocated to Munich, where they are still located today. | |In 1941, BMW supplied the German air force with aircraft engines....
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...1 Nate Lindstrom Professor Fruchter Marketing Principles 10 February 2011 BMW Case Study Analysis According to a 2000 poll conducted by Gfk Roper, women buy 60 percent of new cars and 53% of used cars. A 2009 poll by NBC/Universal shows much of the same: ³eight of 10 women say they are involved, solely or jointly, in car purchase decisions. And a third say they make those decisions themselves´ (Motavalli, 2009). It logically follows that since women easily account for more than half of all car purchases, the marketing efforts of a car manufacturer, such as BMW, should focus on their female demographic. After all, why would they market their products to the minority demographic? Curiously, this is precisely what BMW has decided to do. In a case study of BMW¶s marketing efforts published in Marketing, 10th Edition, authors Kerin, Hartley, and Rudelius list at least three aspects of BMW¶s branding and marketing that they believe lend the most appeal. First, ³BMW is fortunate²we don¶t have too much of a dilemma as to what we¶re going to call our cars,´ says Jim McDowell, vice president of marketing at BMW. He¶s referring to the fact that BMW names their cars using simple numbers and letters²for example, the M3 or the 7 series²rather than using unique names as so many other manufacturers do (Kerin, Hartley, & Rudelius, 2011). Lindstrom 2 Second, the authors identify that BMW has been successful as placing its vehicles in four different James Bond movies...
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...Bachelor Thesis Department of Business Studies Århus, the 3rd of May 2010 Valuation of BMW - Financial & Strategic Analysis Authors Rasmus Ramshøj Pløen Exam no. 282821 BSc (B/IM) Mikkel Kronborg Olesen Exam no. 283755 BSc (B) Academic Advisor Nicolai Borcher Hansen ASB Aarhus School of Business TABLE OF CONTENTS 1 PREFACE ................................................................................................................................................................ 4 1.1 1.2 1.3 1.4 1.5 1.6 2 EXECUTIVE SUMMARY ................................................................................................................................................ 5 BRIEF INTRODUCTION ................................................................................................................................................. 6 PROBLEM STATEMENT ................................................................................................................................................ 8 STRUCTURE .............................................................................................................................................................. 9 DELIMITATIONS AND ASSUMPTIONS ............................................................................................................................ 10 METHODS ..........................................................................................................................................
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...and Acquisition. Focus on one success and one failure story 2. Assignment Flow 3.1 Executive Summary 3.2 Failure – BMW and The Rover Company * Summary * Acquisition Details * Analysis * What Went Wrong? 3.3 Success – AkzoNobel N.V – Imperial Chemicals Industries plc. * Summary * Acquisition Details * Analysis * Success Story 3 Closure 2.1 - Executive Summary In the current knowledge based economies, in order to gain access to one of the most important intangible asset of one business – the brand –, the companies merge or acquire the targeted brand (Kumar & Blomqvist, 2004) Today’s business world deals with an increasing phenomenon of Mergers and Acquisitions (M&A‟s), a process through which companies gain access to some tangible and intangible resources. The benefits of mergers and acquisitions (M&A) include, among others: * a diversification of product and service offerings * an increase in plant capacity * larger market share * utilization of operational expertise and research and development (R&D) * reduction of financial risk Firstly, if a merger goes well, the new company should appreciate in value as investors anticipate synergies to be actualized, creating cost savings and/or increased revenue for the new entity. Research indicates that up to 70%...
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...Intel Corp. You are reviewing the proposal for the new plant to be built in China. The new plant requires a large onetime investment but will provide significant capacity addition as well as cost savings over the next 10 years. Should you approve the proposal for the new plant? □ “HSBC FTSE 100” is a index fund that replicates FTSE 100 index. The fund offers investors a convenient diversification at a low price. Would you be interested in investing in the fund (or somewhere else)? » What if it was TESCO that was considering HSBC FTSE 100 as an investment vehicle? □ In 2004, Sergey Brin and Larry Page, the founders of Google Inc., were talking to investment bankers from Morgan Stanley. They hope to finance a number of potential opportunities through IPO (initial public offering). One of the most important concerns is of course what the offering price should be. Part 1 Project Valuation Dr. Kirak Kim MSc Corporate Finance EFiMM0017 Project Valuation Investment decision Revisit: Valuing unlevered cash flows Revisit: Uncertainty and the notion of risk Weighted average cost of capital Adjusted present value Two Main Decisions in Corporate Finance What is the objective of the firm (corporation)? max{ Shareholder Value } i.e., owners’ wealth “How should the firm evaluate its investment alternatives?” Investment Decisions “How should the firm (optimally) finance its investment projects?” Financing Decisions Investment-side (capital budgeting)...
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...External Analysis PESTEL Analysis In order to distinguish and break down the fundamental elements of the company’s external environment it is suggested to use PESTEL analysis (Academy, 2015). Figure below illustrates all crucial external factors, which need to be considered while doing external analysis. PESTEL stands for: Taken from: http://www.professionalacademy.com/blogs-and-advice/marketing-theories---pestel-analysis In the following paragraphs, each factor is going to be analyzed separately. Political By selling autos in many countries of North America, Asia andWestern Europe (Tesla, 2014), the companyneeds to manage any political issues affecting its business operations. For example,one of the main political aspects influencing on the industry is ecological assurance lawsto stimulate the production of more environmentally friendly vehicles to meet the emanation levels(Environmental-protection.org.uk, 2014). The next essential aspect is US government vitality advance projects for innovative work of new vehicle advances (Department of Energy, 2014). For this situation, numerous automobile producerswill be occupied with entering the new business sector in automobile industry. Economical Nowadays, US market is most attractive for Tesla Motors, because of the economic growth and level of GDP (Tradingeconomics.com, 2015). Figure 1 below illustrates the growth rate of US GDP from 2013 to 2015. Figure 1. US GDP growth rate (%). (Trading Economics, 2015) In addition,...
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...Jones Model & Modified Jones Model Theory and Practice What is Earning Management? Earning management is the process that one firm’s manager presents the finical statement in his favorable way rather the real performance in a certain period. “Earnings management occurs when managers use judgment in financial reporting and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company, or to influence contractual outcomes that depend on reported accounting numbers.” (Healy and Wahlen, Accounting Horizon, 1999) Earning management is generally happened within the generally accepted accounting principle (GAAP) choice, under the GAAP, firms have the flexibility to make their accounting choices and required to do estimations on their finical report. The intention of the “flexibility “is to make finical statements can by more accurately present a firm’s operating result in a certain period, companies have to estimate numbers (such as expense) based on their assumptions for the future, but the problem is that GAAP doesn’t have clear boundary to define what is a normal estimation (legal) and what is an extreme estimation (illegal). Therefore as long as the manager has logically explaining of those assumptions, then their estimation is legal. By definition, earning is the sum of operating cash flow and non-cash earning (accruals). Thus, if a manager wants to manipulate a firm’s earning, he...
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...1. Introduction The business report below presents full information about Pirelli & C. S.p.A(Società per Azioni (Joint Stock Company)). It includes company`s profile, current financial and sustainability performance, business research analysis which is divided into 2 types itself. One of the research provides company`s Strengths, Weaknesses, Opportunities and Threats on the Global Market whereas other research reports about the market analysis within the Pirelli`s home market. The report on company`s current profile includes a reliable information and research analysis that corresponds the data in ‘The 2014 Pirelli Integrated Report (2014 Annual Report)’ which is announced in the company`s official site. 2. General description of the company Internationalism, technology, talent, speed and culture are part of Pirelli's past, present and future. (2014 Annual Report) Company`s history 1872 there was founded the limited partnership company ‘G. B. Pirelli & C.’ in India rubber manufacturing industry by the engineer Giovanni Battista Pirelli(1848-1932) which initially produced rubber textiles, tubes and belts for machinery. Then it expanded its business with producing undersea cables. In 1922 the company was added to the Italian Stock Exchange. The head office is located in Milan, Italy. Company`s profile Pirelli & C. S.p.A specialized in producing Consumer (for cars and motorbikes) and Industrial (for trucks, buses and farming vehicles) tyres. According to the ‘2014...
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...A Fundamental Valuation of the BMW Group Authors: Jalpesh Madlani – MSc Applied Economics and Finance Jens Chr. Ulvestad – MSc Applied Economics and Finance Supervisor: Jeppe Schoenfeld, Deloitte Number of Pages and Total Characters: 120 pages, 254.877 characters Submission Date: October 22nd 2012 Master Thesis – Copenhagen Business School 2012 Resumé This thesis conducts an in-depth analysis of the BMW Group in order to determine the fair value of the Group’s share price and to conclude whether it is over- or undervalued. The BMW Group is one of the largest automotive manufacturers that focus on the premium segment, producing both automobiles and motorcycles. The Group is headquartered in Munich, Germany and its business operations are divided into three segments: Automotive, Motorcycle and Financial Services, where the Automotive segment provide by far the largest source of revenue. The BMW Group is analyzed by conducting a strategic and financial analysis, where several models are applied and financial drivers thoroughly analyzed from a historical perspective. The findings from these analyses act as a foundation for forecasting the future performance of the Group. The share value is estimated by utilizing the discounted cash flow (DCF) valuation model on the forecasted figures. A multiple valuation model (EV/EBITDA) is also conducted in order to triangulate the value derived from the DCF valuation with a relative valuation based on market multiples...
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...| BMW Strategic Analysis | | | | Management 452.301 | Table of Contents Executive Summary 2 Introduction of Company and Current Situation 3 External Environment Analysis 4 General Environment 4 Industry Environment 6 Competitor Environment 7 Conclusion of External Environment Analysis 8 Internal Analysis 10 VRIN Analysis 10 Financial Analysis 12 Conclusion of Internal Analysis 15 Strategy 16 Identification of Key Problems 20 Recommendations and Implementations 21 References 24 | Executive Summary BMW is known for its manufacturing of premium-brand cars and off-road vehicles under the BMW, MINI, and Rolls-Royce labels, as well as motorcycles under the BMW and Husqvarna brands. Many manufactures such as BMW, Mercedes, and Audi produce cars in foreign markets. The three car makers that are BMW’s main competitors in the luxury auto industry are Lexus, Mercedes-Benz, and Audi. The companies are worried most about the exchange rate fluctuations that threaten their profits if the euro starts appreciating against other currencies. With that, BMW is trying to come out with new technology that keeps them ahead of the competition. To do so, they released what is called Efficient Dynamics to ensure a noticeable reduction of consumption and emissions while simultaneously increasing the performance and driving pleasure of the vehicle (BMW EfficientDynamics). The company has also discovered such items as the BMW ActiveHybrid...
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...and other competitive advantages over competitors Foreign direct investment (FDI) is an investment in a business by an investor from another country for which the foreign investor has control over the company purchased. The Organization of Economic Cooperation and Development (OECD) defines control as owning 10% or more of the business. Businesses that make foreign direct investments are often called multinational corporations (MNCs) or multinational enterprises (MNEs). A MNE may make a direct investment by creating a new foreign enterprise, which is called a greenfield investment, or by the acquisition of a foreign firm, either called an acquisition or brownfield investment. Green-field investments occur when a parent company begins a new venture by constructing new facilities in a country outside of where the company is headquartered. There are several reasons why a company opts to build its own new facility rather than purchase or lease an existing one. The primary reason is that a new facility offers the maximum design flexibility and efficiency to meet the project's needs. An existing facility forces the company to adjust based on the present design. Additionally, all capital equipment needs to be maintained. New facilities are typically much less costly to maintain...
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...Fiscal Policy The status of the United States has an effect on society. The U.S. deficit, surplus, and debt affect society in many ways. One does not take the time to see the impact it has on civilization. The status of the United States has an impact on tax payers, future Social Security and Medicare users, unemployed individuals, students, exporters, importers, and most of all, the country’s Gross Domestic Product. In the following, the team will discuss how the U.S. deficit, surplus, and debt affect society, not only in the United States, but also around the world. Tax Payers The influence of fiscal policy changes scheduled to occur at the end of 2012 can poses serious challenges for tax payers. One area where high tax payers are disagreeing is the increase in tax rates resulting part due to the 2001 and 2003 tax cuts. President Obama has asked for the reinstatement of the higher top tax rates in his budget submission to the Congress. The increase in the Medicare tax and its expansion to unearned income for high income earners under the Patient Protection and Affordable Care Act of 2010 also contributes to the increase in top tax rates. The concern over the top individual tax rates has been a focus because of the special role played by flow-through businesses like S corporations, partnerships, limited liability companies, and sole proprietorships. These businesses employ 54% of the private sector workforce and pay 44% of the federal income taxes. Higher taxes result...
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...| BMW Strategic Analysis | | | Amanda King, Zachary Conner, Chris Miller, Sulaiman Alsayyari | Management 452.301 | Table of Contents Executive Summary 2 Introduction of Company and Current Situation 3 External Environment Analysis 4 General Environment 4 Industry Environment 7 Competitor Environment 7 Conclusion of External Environment Analysis 8 Internal Analysis 10 VRIN Analysis 11 Financial Analysis 12 Conclusion of Internal Analysis 16 Strategy 17 Identification of Key Problems 20 Recommendations and Implementations 21 References 25 | Executive Summary BMW is known for its manufacturing of premium-brand cars and off-road vehicles under the BMW, MINI, and Rolls-Royce labels, as well as motorcycles under the BMW and Husqvarna brands. Many manufactures such as BMW, Mercedes, and Audi produce cars in foreign markets. The three car makers that are BMW’s main competitors in the luxury auto industry are Lexus, Mercedes-Benz, and Audi. The companies are worried most about the exchange rate fluctuations that threaten their profits if the euro starts appreciating against other currencies. With that, BMW is trying to come out with new technology that keeps them ahead of the competition. To do so, they released what is called Efficient Dynamics to ensure a noticeable reduction of consumption and emissions while simultaneously increasing the performance and driving pleasure of the vehicle (BMW EfficientDynamics). The company...
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...DAFTAR ISI BAB I Gambaran Umum Bisnis.................................................................................................... ......4 1.1 Latar Belakang...................................................................................................................... ......4 1.2 Tujuan dan Manfaat ............................................................................................................ .......5 1.3 Ruang Lingkup Bisnis........................................................................................................... .......5 1.4 Stakeholder.................................................................................................................................6 1.5 Pendekatan ................................................................................................................................7 BAB II Rencana Pemasaran...............................................................................................................8 2.1 Deskripsi Sektor Industri.............................................................................................................8 2.2 Analisis Potensi Pasar dan Kompetitor.......................................................................................9 2.3 Analisis STP................................................................................................................................10 2.3.1 Segmenting........................................................
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